Download KQ among firms eyeing Air Madagascar slake

Business Daily
Date: 29.12.2016
Page 7
Article size: 335 cm2
ColumnCM: 74.44
AVE: 141444.44
?AVIATION Kenya Airways listed as one of the carriers gunning for a stake of up to 49pc in the ailing airline
KQ among firms eyeing Air Madagascar slake
BY MUGAMBI MUTEGI
and Kenya Airways are among four of Consultants to select a suitable strategic
the last seven finalists at the opening of partner, marking the next stage in the
the bids," Gilles Filiatreault, Air Mada­ rescue plan.
"We are on schedule. Air Madagascar
gascar's general manager, is quoted as
will resume its takeoff in the first quarter
saying by the Madagascan press.
its fortunes.
The management of KQ, as the airline of 2017 with its new strategic partner,"
The management of the cash­ is known by its international code, did said Benjamina Ramantsoa, Madagas­
strapped Air Madagascar recently dis­ not respond to the Business Daily's que­ car's minister of transport.
closed that Kenya Airways, Air Austral, ries on the matter by the time of going to
Ethiopian Airlines, Air Mauritius and press. Air Madagascar, which is majority­ Daily flights
National carrier Kenya Airways has
been shortlisted among seven airlines
interested in acquiring a minority stake
in Air Madagascar, which is looking for
a strategic partner to help turn around
South African Airlink are some of the
owned by the Madagascan government, Kenya Airways, which operates daily
flights to Madagascar, is bidding for a
Madagascar is an island nation in the stake in the ailing airline even as it looks
carriers gunning for a stake of up to 49 was founded in 1947.
per cent.
The government of Madagascar, with Indian Ocean off the southeastern coast to stabilise its business back at home.
financing from the World Bank, is seek­ of Africa. Its national carrier has a fleet
KQ's business has in recent years
ing a strategic investor "willing to invest of 13 aircraft which fly to 18 destinations come under pressure due to expensive
in the company by taking minority equity
loans, low tourist numbers, and the Ebola
including Paris, Marseille, Mauritius,
shares and by bringing know­howto the
outbreak in West Africa among several
Comoros, Reunion, the Seychelles and
airline as well as committing to run it."
other negative factors.
Mayotte as well as 11 domestic routes.
Kenya Airways' interest in owning
The national carrier is implementing
The carrier has 1,117 employees and
a piece of the Madagascar national car­
a McKinsey­backed restructuring plan
is based at Ivato International Airport
rier, and helping to revive it, comes at a
which has led to interventions like sale
in Antananarivo, Madagascar's capital
time when it is itself in desperate need
or lease or aircraft, balance sheet restrict­
city.
of about Sh60 billion to recapitalise the
ing and staff cuts, aimed at steering the
Air Madagascar says it needs about
loss­making business.
business back to profitability.
$25 million (Sh2.5 billion) in the form of
The airline, which is 29.8 per cent
Mbuvi Ngunze, the airline's chief
owned by the Treasury and 26.7 per cent a loan to rescue the company burdened executive, has in the past said Kenya
owned by Air France­ KLM, has posted by high­cost debts, an ageing fleet, high Airways requires about Sh60 billion in
staff costs and unprofitable routes. A new
four consecutive full­year losses begin­
a mixture of equity and debt to plug its
board and management has already un­
ning March 2013.
huge capital hole.
dertaken a reduction in routes and costs.
In the year to March, KQ posted a
The airline's precarious financial situ­
net loss of Sh26.2 billion. "Air Austral, The government of Madagascar recently ation makes its interest in a slice of Air
Air Mauritius, South African Airlink engaged Dubai­based TroyAvi Aviation Madagascar unusual.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Business Daily
Date: 29.12.2016
Page 7
Article size: 335 cm2
ColumnCM: 74.44
AVE: 141444.44
A Kenya Airways plane. The airline's precarious financial situation makes its interest in
a slice of Air Madagascar unusual, salatonnaju
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya